You’ve found the perfect house that already has you dreaming about lazy summer afternoons on the wraparound front porch and family pinnacle nights in the spacious living room. Unfortunately, it’s also a foreclosure that may be a risky buy. Here are three things you need to do before purchasing a foreclosure property.
Educate Yourself on Foreclosures
It’s important to know the process of buying a foreclosure as it differs from a conventional purchase. For instance, you’ll have to secure mortgage hazard insurance in time for closing, but you may not be fully aware of the condition of the home if it’s still winterized or stuffed to the ceilings with garbage bags of the previous owners’ belongings.
Learn the Home’s History
Sellers have to provide a disclosure of any existing defects. However, in a foreclosure situation, the seller is a bank instead of someone who has lived in the house. Ask neighbors for anything they know about the property, check the tax records for other sales, and look for obvious clues of sabotage and intentional damage.
Hire an Inspector
A home inspection is always a good idea, but it is absolutely essential when purchasing a foreclosure. Inspectors are able to catch costly problems with major systems so you’ll have an idea about what kind of repairs may be necessary.
Purchasing a foreclosed property is a great way to get a steep discount on a good home. As long as you know what you’re in for first, it can be a smart investment.